The Nigerian Inter-Bank Settlement System (NIBSS) has reported a 38% expansion in the fraud watchlist during 2025, as financial institutions flagged a total of 13,117 Bank Verification Numbers (BVNs) for suspected fraudulent activities. This marks a significant increase from the 9,505 BVNs flagged in the previous year, representing an additional 3,612 BVNs linked to potential financial crimes.
Details of the Watchlist Expansion
According to the NIBSS annual fraud report, the surge in flagged BVNs is attributed to enhanced detection mechanisms and a rise in attempted fraud cases across the banking sector. The report notes that the watchlist now contains over 150,000 BVNs cumulatively, reflecting the ongoing challenge of financial crime in Nigeria. Banks have been mandated to routinely screen transactions against this watchlist to prevent fraudulent activities such as identity theft, unauthorized transactions, and account takeovers.
The NIBSS spokesperson stated, “This 38% increase underscores the effectiveness of our collaborative fraud detection systems, but also highlights the need for continuous vigilance. Financial institutions are investing heavily in artificial intelligence and machine learning to stay ahead of fraudsters.”
Implications for Bank Customers
The expansion of the watchlist has direct implications for bank customers. BVNs flagged on the watchlist are subject to restrictions, including account freezes and transaction holds, until the identity is verified. Customers whose BVNs are erroneously flagged have reported difficulties accessing funds, prompting calls for faster dispute resolution mechanisms. The NIBSS has assured customers that the watchlist is regularly updated to remove false positives, with an average resolution time of 48 hours.
Banking analysts suggest that the increase in flagged BVNs could lead to temporary inconvenience for legitimate customers but is necessary to curb the estimated N5.2 billion lost to fraud in the first half of 2025 alone. The Central Bank of Nigeria (CBN) has urged customers to protect their BVN credentials and report any suspicious activity immediately.
Call for Enhanced Security Measures
In response to the rising fraud numbers, NIBSS has announced plans to deploy additional security layers, including biometric verification and behavioral analytics, across all banks by mid-2026. The system will integrate with national identity databases to reduce reliance on BVN alone. Meanwhile, the Nigeria Police Force’s Cybercrime Unit has launched investigations into syndicates linked to multiple flagged BVNs, with 12 arrests already made in the first quarter of 2025.
The NIBSS spokesperson added, “Fraudsters are becoming more sophisticated, but our collective efforts are making it harder for them. We advise customers to be wary of phishing attempts and to avoid sharing BVN details with unauthorized parties.” Industry experts recommend that banks enhance customer education on fraud risks and streamline the process for appeal in cases of wrongful flagging.
